Australia to lose its Silver Gold Medal

For some time now Australia has been the world’s second biggest gold producer behind China.  The table below shows the top 5 producers in the world and Russia has been closing the gap on Australia’s second place for the last few years.  In 2016 they were just 20 tonne behind.

According to Russian giant Polyus’s CEO Pavel Grachev this week 

"The largest facility in Russia and one of the largest worldwide has been launched in the Magadan Region. The volume of ore processing will exceed 10m tonnes per year, while the volume of gold production will equal 13 tonnes per year. This brings the country’s gold production up by 5%, which makes Russia the second-biggest gold producer in the world after China," 

Now our math still has 13 tonne as less than the 20 tonne gap we saw last year but maybe they know of another 8 tonne somewhere not mentioned.  Also the mine won’t be in full production until 2018 so our 2017 mantel looks safe.  Irrespective the trend of closing in on our ‘silver’ medal in gold world production continues.

As usual there are some interesting takeaways from this announcement.  Again when you look at the yields of just 1.3g per tonne of rock mined you are reminded of gold’s intrinsic value.  It’s certainly far harder than the $13.5 trillion dollars the world’s central banks have printed since the GFC…

The Russian central bank buys practically ALL the gold mined.  China, too, does not export any of its gold.  Australia on the other hand, sees most of its gold production leave the country.  Perth Mint processes practically all our gold ore mined and most of that is exported.  

Russia has around 1715 tonne in gold reserves, China reports 1845 tonne (but no one believes it is that small), whilst Australia has just 79.85 tonne, and all of that held in London.  2 of the 3 above see what’s coming and are getting ready.